Programmatic Transparency And Fraud Issues Have Morphed. Solve Both Or You've Sold Neither

Sir Martin Sorrell is worth listening to -- always. It's not by accident that he runs WPP, and so when he says something you instinctively disagree with, it's well worth delving a little further.

So, his contention is that he's surprised at the transparency furor over programmatic advertising, no doubt carried out through real-time buying (RTB).

I think many observers would be quite surprised at his surprise. After all, the issues around transparency have been laid out many times -- and while arguments may ensue over how transparent a particular agency is, the problems that need countering are out there in the open to be discussed. Mind you, he was talking about WPP's Xaxis -- which, I am reliably informed, is well known for not sharing first-party data. In other words, a brand can run a campaign safe in the knowledge that a rival on the same platform will not gain from their data discoveries.

Sorrell also points out that a 15% markup on inventory is accepted as an industry average. If this is the case, then he would indeed appear to be correct.

The real issue, however --  discussed at the recent MediaPost OMMA RTB London event with ISBA, which represents advertising brands -- is that companies don't know how many middlemen are involved in their inventory being planned, bid for, bought, tracked and billed. An ISBA representative went so far as to say that one auditor had warned one client that as much as half of their media spend went on commissions, technology and middle men.

This leads into the next issue of viewability and fraud. Statistics can vary, but often level out at around half of display adverts either not being viewable or are being clicked on by a bot. If these scenarios are true, it would lead advertisers to wonder if they're spending four times the value of the media they eventually get.

We asked for a show of hands at the London RTB event to signify who had transparency as a daily issue in their working lives, and only a small handful raised an arm. While you could say that this is because the room was full of agency people and transparency is more of a brand concern, there was evidently a lot of fixed attention paid to our debate on click fraud and viewability.

So maybe Sorrell has a point. If you are seen to run a programmatic trading desk that is open on its charges and protects first-party data, then transparency issues may seem to be a surprise.

However, I think there is a lot of pent-up frustration with programmatic. It's the new tech-driven kid on the block -- and so it will always be criticised, along with any other trading mechanism, when fraud and viewability are such issues.

So, in a way, these concerns which pre-date programmatic are now dogging it, adding to the concern that advertisers are either being ripped off or at least being overcharged for inventory a human never sees or interacts with.

That's why transparency is such a huge issue. Because fraud hasn't gone away and the viewability threshold is set so low.

So you might well think you're doing okay in solving the transparency issues that programmatic gave birth to - namely, how much are you charging me and where's my data?

But if you don't solve the issue of has my ad been seen by a human, the transparency debate will roll on.

2 comments about "Programmatic Transparency And Fraud Issues Have Morphed. Solve Both Or You've Sold Neither".
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  1. Desiree Tunstall from Verto Media, October 23, 2014 at 11:08 a.m.

    There are three levels to the transparency problem - with education being the root of each.

    Level 1 - How many companies are between the marketer's dollars and the publisher's supply? Who are the companies and what are their margins? If a marketer does not know about trading desks, ad networks, ad exchanges, demand-side platforms and data providers - each potentially taking a share of the ad dollars - the marketer is not equipped to ask the right questions.

    Ask your agency - who handles programmatic buying? Does your trading desk work with networks? If the function of a trading desk is to buy media, why are you working with a network? Do you rely upon demand-side platforms? What are the technology costs? Is it a revenue share or flat fee model? Are these companies transparent? Why not?

    Programmatic did not give birth to middlemen. This concept has existed for centuries in countless industries. We're talking about basic arbitrage. You give me $5 for a product, I find someone selling it for $3. I keep the split.

    Level 2: What am I buying? In the same way you cannot sit your 10 year old in front of the world wide web and simply cross your fingers that he/she will not encounter pornography, hate speech and bullying, you cannot trust your dollars on the entire Internet. Buyers should purchase from trusted sellers with transparent domains and at prices that make sense. If reports indicate you bought NY Times for $0.02 CPM, that's not what you bought.

    Level 3: Did anyone see it? I don't buy into the viewability issues en masse. Granted, it's important that ads can appear places people can see them, but is this really just a digital problem? You get a snack during tv commercials. You turn the radio down when they play 17 minutes of uninterrupted commercials. You turn the page of a magazine to the next article, skipping over the ad.

    Digital allows measurement which traditional media made traditionally hard, but these problems are not new. They require education, attention and a willingness to keep up with the technology.

  2. Ed Papazian from Media Dynamics Inc, October 24, 2014 at 6:05 a.m.

    You make some interesting points, Desiree, however the question of transparency is now being cited by some programmatic proponents as a reason for applying this discipline to "legacy media" , notably, TV. For example, the claim has been made that many TV stations don't know who they are selling their time to, which baffles me, frankly, and programmatic will "solve" this "problem". While barter operators, who create "time banks", then use the time for any of their clients ( subject to station approval ), have been around for decades, the vast majority of TV spot transactions are for specific advertisers and have no transparency issues. The same goes for network TV, Magazines, radio, etc. As for viewability, the fundamental difference between the Internet and "legacy media"is that 99.9% of the latter's ads run as ordered, giving the entire audience an opportunity to see ( or hear) the ad message---if it chooses to. If it is true that the corresponding ratio for online ads is really 50%, one has to ask how many of the 50% who have the opportunity to note an ad actually do so?

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